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MediaRing Acquires Cavu, a Singapore IT Infrastructure Services Provider, for S$22million.
- Vendors will get an additional S$3.0 million if certain financial performance targets are achieved for FY2007;
- Cavu purchase will provide MediaRing with a source of recurring income from the Utility On-Demand Model;
- Boost Data Services business and provide opportunities to cross sell Voice and Data Services to corporate clients
SINGAPORE - 5 October 2007 Mainboard-listed MediaRing Ltd ("MediaRing" or the "Group"), a leading VoIP telephony service provider in Asia, announced today that it is acquiring Cavu Corp Pte Ltd ("Cavu"), a Singapore-based IT infrastructure services provider, for S$22.0 million in cash and shares.
Established since 1998, Cavu is a leading IT infrastructure services provider that offers a full range of Enterprise solutions, including an innovative ‘pay-as-you-use’ offering. This needs-based system for computing power, called the CAVU Utility On-Demand Model, presents a number of benefits to customers, including upgrades and technology refresh, thereby protecting the customers’ investment. Most importantly the Utility Model frees customers from huge upfront capital investments in technology and the risk of being left holding onto obsolete equipment.
Cavu, with revenue of approximately S$75 million and S$2.8 million in profits in FY2006, was in June 2007 ranked 13th in the FG50, an annual business award that recognises the 50 fastest growing companies in Singapore. The annual ranking is organised and certified by DP Information Group and supported by Ernst & Young, IE Singapore, SPRING Singapore and The Business Times.
MediaRing expects the acquisition of to strengthen its position as a premier Voice and Data communication services provider in Asia.
As purchase consideration, MediaRing is funding it through a cash payment of S$14.5 million and an issue of an aggregate of 33.33 million new shares. A further purchase consideration of up to S$3 million in cash is payable to the vendors upon the achievement of certain financial performance targets by Cavu for FY 2007.
Commenting on the synergies between the two companies, MediaRing’s CEO Mr Khaw Kheng Joo said, "Cavu’s needs-based, IT infrastructure services business is highly complementary to MediaRing’s Data Services. The beauty of utility computing is that everything can be neatly packaged together, both hardware and software; storage and hosting, round-the-clock service and support, and delivered to customers at cost effective rates. This makes it highly attractive to businesses as they will not have to incur capital expenditure or run the risk of technology obsolescence. MediaRing believes that with this acquisition, opportunities will arise for us to enhance our Data Services business and at the same time, sell into Cavu’s existing corporate client base and vice versa."
Since its incorporation Cavu has provided Utility Computing services to clients in the Banking/Financial, Manufacturing and Distribution. Some of their existing clients include the FJ Benjamin Group, Unilever, PAP Community Foundation and YKK Holding Asia Pte Ltd.
Vesmond Wong, Cavu’s CEO said, "We are pleased to be an integral part of MediaRing. MediaRing is a recognized brand in the enterprise space. Its global VoIP network helps enterprises save substantial amount in their cost for international phone calls. Along the same line, Cavu’s Utility Model for IT infrastructure helps enterprises to save money in their IT infrastructure roll out. Technology refresh is done without the huge capital investment normally required from customers. We believe our IT infrastructure services offering will complement MediaRing’s Voice and Data Services to the Enterprise customers really well."
Cavu is MediaRing’s third acquisition in the last two years, demonstrating MediaRing’s continued commitment to pursue organic and inorganic business growth through strategic acquisitions or joint ventures with strong regional players in key markets across Asia.
About MediaRing
With offices in Singapore, Malaysia, Shanghai, Beijing, Hong Kong, Taiwan, Japan, Indonesia, Cambodia and Sunnyvale (USA), MediaRing is a leading VoIP telephony service provider in Asia who enjoys a growing share of the global VoIP market. Through its strong technological capabilities and extensive distribution network, MediaRing brings high-quality voice services to carriers, enterprises, service providers, and consumers with its wide range of service offerings. Its extensive partnerships with carriers around the world allow call terminations worldwide. As a pioneer in VoIP services with unique proprietary technology, MediaRing derives more than 85 per cent of its revenue from outside Singapore
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